Bank of China (UK) Ltd, a wholly owned subsidiary of Bank of China, yesterday said it would buy a 30 percent stake in Swiss Heritage Fund Management (HFM) for 60 million yuan, in an effort to further expand its private banking business in overseas markets.
Bank of China yesterday said in an announcement that the UK and Swiss regulatory bodies had approved the deal. After completion of the acquisition, Bank of China (UK) Ltd will further increase its stake in HFM to 70 percent through the purchase of new shares and HFM will be renamed as Bank of China (Switzerland) Fund Management Company.
Established in 2002, HFM is a subsidiary of Heritage Bank, an independent Swiss private bank located in Geneva.
Wang Zhaowen, BOC's spokesman, said Bank of China highly valued HFM's professionals in fund management and its wide range of investment products, which has been performing well for several years.
"The acquisition of HFM is expected to bring to BOC its experienced professionals in fund management and its expertise in the private banking business, which would greatly enhance the bank's overall service quality in the future," Wang said.
He also added that HFM's location in Geneva, a city famous for its private banking business, was also conducive for BOC to share market resources and promote private banking businesses in Europe as well as other places in the world.
Bank of China (UK) Ltd started business in 2007, which paved the way for Bank of China to further expand into the European market. With registered capital of 200 million pounds, the new subsidiary mainly deals with retail as well as corporate banking. The BOC London branch established in 1929 deals with wholesale business.
HFM, which is in charge of offshore funds, a Swiss regulated umbrella fund and institutional portfolios on pension funds, is maintaining an investment approach of combining both traditional and alternative asset management. Among the total of $362 million funds managed by the company, Chinese funds account for about 50 percent, amounting to $179 million.
Cai Rong, a banking analyst at Everbright Securities in Shanghai, said the acquisition was considered as another effort by BOC to expand its overseas business and would set a good example for other banks in China.
"The acquisition is expected to diversify the services provided by Bank of China and strengthen its integrated competitiveness in the global market," Cai said.
(China Daily July 30, 2008)